Kentucky Foreclosure Laws

Under the Kentucky foreclosure laws, foreclosures are judicial. The lender goes to court to file lis pendens against the defaulted borrower. The final judgment of the foreclosure is issued by the court. On the part of the borrower, failure to pay the amount owed to the lender leads to foreclosure sale. Notice of Sale will be sent out and public auction will soon take place. Typical foreclosure timeline is 6 months.

In cases where a borrower defaults on payments, the lender can file a lis pendens or pending lawsuit. This legal notice indicates that there is an impending foreclosure on the distressed property. The notice will be sent to the borrower whom given 20 days to pay the total amount due. For abandoned property, the lender may take possession of it once the borrower defaults on payments.

Kentucky Judicial Foreclosure

Kentucky foreclosures are judicial wherein both lender and borrower are given fair treatment. When the borrower or homeowner commits default on payments, the lender can pursue a foreclosure. A lis pendens should be filed by the lender in the court. A copy of the petition should be mailed to the defendant. The defendant is granted 20 days to respond. If the borrower fails to do so, the court judgment will be in favor of the lender; hence, a foreclosure sale will be schedule to take place.

Voluntary sale of the distressed property is allowed in Kentucky. This happens when the borrower decides to settle his or her dues to the lender.

Statutory right of redemption is restricted. In order to redeem the foreclosed property, the borrower pays, in full, the sum of the unpaid loan plus costs and 10% interest. One year redemption is granted if the proceeds of the foreclosure sale is less than 2/3 of the appraised value. The right to redemption is marketable; hence, the mortgagor can sell it to any interested third party.

In cases where the property in foreclosure is sold for less than the amount loaned by the borrower, the lender can claim deficiency judgment. This means that the borrower shall pay for the difference between the amount property sold and the amount of the original loan.

Foreclosure sales are conducted like that of a public auction and headed by the ‘Master Commissioner’, a court official. The highest bidder wins and awarded with property ownership. The court confirms the sale through a hearing.

Notice of Sale

Usually, the foreclosure sale takes place at least one month after the court ruling. The Notice of Sale shall be published in local newspaper 3 weeks before the public auction. Postponement of sale must be authorized by court; otherwise, it will be invalid.